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December 19, 2008

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I'm afraid small (especially micro) businesses are going to be regulated out of existence before long. As regulation and related expenses increase, its getting to difficult to turn a profit. It was always already tough satisfying zoning laws, codes offices, health departmetns, ADA compliance, accounting requirements for taxes, etc. This does not even include the liability concerns that are starting to outweigh the benefits of a little extra income.

Now look at laws like the new CPSIA regulations created after the lead in toys disaster of last year. Instead of requiring testing of imports from China or from large manufacturers, or something else reasonable, next year they will require one item from every batch of every design of every children's product , no matter the material, to be tested and certified before sale or you will be committing a felony. (including stay-at-moms t-shirts, grandpa's carved wooden train that is not even painted, half the stuff you see at art festivals/ebay/etsy). The scope and expense of this testing has flown pretty under the radar but has made that artsy community declare Feb. 10, 2009 as National Bankruptcy Day (http://nationalbankruptcyday.com/).

This has caused a friend to realize that their plan of opening a "green" store for local children's items is now a dangerous concept (for her well being, the penalties are harsh to even retailers who sell the stuff without this testing done). She is considering altering her business model to one that is "safe" and will get mostly stuff from large manufacturers in China, who do such volume they can afford the testing, though she regrets that will just make her not much different from the big box stores, who she doesn't want to immulate and obviously can't compete with. Right now she just hopes someone will realize the impact of the law before Feb and modify it, but I guess no one wants to be that congressman branded as the one who is for lead in toys, which is of course how the headline would read. The few hedlines in the paper now I've seen are calls from watch organizations demanding all these "dangerous" items not be given until Feb. to sell. Even the articles make it sound like they are talking about products we know or have reason to believe have lead.

I've bailed out of small business before because of these regulatory barriers and the fear of liability, but this one just seems over-the-top given the reason for her store was to provide safer children's products and the reach of these regulations and expensive testing go all the way down to the craft fair hobbiest.

There is a lot of talk about how small businesses are unfairly taxed out of existence, but I think this shows that it is regulation that will eventually be what turns the entire business sector of this country into one big Walmart. It has convinced me to finally give up on the business sector as the great oppotunity to make it in this country and enjoy the comfort of earning a paycheck.

I think there is a thin line sometimes, between success and the process towards success.

Many articles such as this one are anecdotal, and some may even argue is a outlier. So long as one does not extrapolate such anecdotes to mean, "Success is so easy, anybody can do it!" it should be OK.

Instead, I think the lesson to take away from such stories is simply let it motivate you and to keep trying, regardless of success or failure.

The only true failure is to give up trying on what you want the most out of life.

I doubt, very highly, that small businesses are going to get regulated out of existence.

The problem with turn your hobby into money is that then it isn't your hobby anymore. I'm actually quite positive on the positive, and have always had a nice sideline building personal computers when I wanted to scratch that itch and then selling them at a profit.

But the problem with income is that we start to depend on it. When you turn your hobby into cash, you are generally committing to continuing to use that hobby for money, unless you get a better job that replaces the income. And once you don't have a choice to engage in the hobby, a lot of the intrinsic pleasure can be lost. Kids rewarded for playing with markers stop playing with them as soon as they lose the reward...kids who aren't rewarded continue playing, because markers are awesome.

For every 1 Trism there are 1,000 unknowns that go no where. Not to say someone shouldn't try. But it's far from money in the bank.

FWIW, I agree with Strick. Small businesses and micro businesses are being regulated (and taxed!) out of business.

So Demeter rolled a million-sided dice and had a favorable outcome. So what. He's just another lottery winner.

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